TVs Are Internet Ready/Game Consoles and Set Top Accessories like Roku and Chromecast Stream Content

Vast numbers of consumers are dropping their costly cable and satellite TV subscriptions and relying heavily on internet-based streaming apps instead. Consumers in the under-35 age group are especially likely to bypass expensive cable or satellite subscriptions. The fact that new TV sets are internet-ready is adding fuel to this trend.

Internet-connected TVs boost consumers’ options in news and entertainment, and they enable quick access to games on TV screens. Samsung Electronics, Vizio and LG Electronics, among others, are all offering smart, internet-connected TVs that feature apps linked to streaming content. By 2023, streaming apps were accounting for about one-third of viewers’ attention. That market share will continue to grow rapidly.

The Streaming Age: A Massive Shift in the Way that Americans Spend their TV and Viewing Time

The leading TV audience tracking firm is Nielsen. Its analysts estimated that streaming services (including multiple options such as Peacock, YouTube and Sling, as well as film production firms’ own services at Disney and its competitors) accounted for nearly 40% of American viewers’ time in July 2023, with broadcast TV achieving only a 20% audience share and cable only about 30%. The remaining 10% or so went to viewing films on DVD players and electronic gaming. Streaming options are varied, with some focused on specific types of content, such as ESPN’s streaming sports coverage. This seemingly unstoppable trend has been made possible only by the advent of very fast internet to-the-home and high-speed wireless connections on-the-go.

Giant film production companies like Disney see a competitive advantage in their ability to hold their most exciting or newest movies for distribution on their own streaming platforms, rather than on cable. Giant media companies are scrambling to determine how to best stay relevant in the Streaming Age. Top executives at companies that own leading broadcast TV networks are thinking about selling or spinning off the networks so they can better concentrate on streaming.

Cable and satellite pay TV companies likewise are adapting to change while they lose hundreds of thousands of household subscribers each year. By 2024, the number of U.S. pay TV households had plummeted to about 55 million, from about 100 million ten years earlier. They have been emphasizing their internet service provider (ISP) business offerings, bringing fast internet to the home and office, as well as their own versions of mobile phone subscription services. Cable giant Charter Communications is offering its customers a device called Xumo that helps them stream live TV through an app, intended to be used just like other streaming TV apps like ESPN+ and Disney+. The cable set-top box may soon be a thing of the past. Comcast, another massive cable firm, is rapidly growing its Peacock streaming service while its cable subscriptions slip.

Competition from Netflix: Netflix.com began as one of the largest movie and TV show rental sites in the world, reaching a record 260+ million subscribers worldwide as of late 2023. For a monthly subscription fee, users enjoy streaming an unlimited number of movies. Netflix’s business model initially was based on mailing DVD copies of movies to its subscribers. This was a costly business, involving multiple warehouses and massive postage and handling expenses. At a rapid pace, however, the firm invested in state-of-the-art technology to enable it to focus on streaming via the internet. Netflix shipped its last DVD in late 2023. Playback of a Netflix streaming movie starts a few seconds after download begins. Subscribers instantly watch movies and TV episodes streamed over the internet.

The Netflix streaming content library includes media acquired through deals with corporations such as: ABC, Nickelodeon, Twentieth Century Fox, Paramount, Miramax, Lionsgate, MGM and CBS, among others. Additionally, through its Netflix Originals division, the company produces content available exclusively on Netflix, which continues to rack up growing numbers of Emmy nominations and wins (in 2021, Netflix reported 13 Emmy winning productions). The company invests billions in new film production each year.

Netflix’s effort to shift to streaming video not only is cost effective, it is also positioned the company to take on cable channels such as HBO and Showtime. Operating on a business model dramatically different from those of cable TV channels, Netflix became a true web-based entertainment platform, highly competitive with traditional cable networks and systems.

Sling, Amazon and Other Streaming Competitors: DISH Network offers Sling TV, a moderately priced streaming internet-based service targeting young, mobile-intense viewers who refuse to subscribe to cable TV. Sling TV, which had 2.12 million subscribers as of November 2023 (down from 2.41 million in November 2022 and 2.6 million subscribers in November 2021), offers some of the most popular cable networks including the Food Network, HGTV, TNT, TBS, ESPN and CNN (but broadcast networks ABC, CBS, NBC and Fox are not included). Vital differences from cable TV subscriptions include no long-term contract, a vastly lower monthly fee (in exchange for a much smaller selection of channels), no credit check and no need for additional hardware. Sling is working to innovate more quickly, adding discovery+ to its list of streaming providers and rolling out Sports Scores, a listing of scores across many major sports while watching live content.

Meanwhile, streaming service YouTube TV had over 6.5 million subscribers as of January 2024, up from an estimated 4 million subscribers in 2021. Hulu + Live TV had 4.6 million. Roku, Inc. began by manufacturing home digital media products. The company’s digital media players connect users to streaming content, enable content publishers to build and monetize large audiences and provide advertisers with unique capabilities to engage consumers. The firm also offers the Roku Channel offering ad-supported video-on-demand in the U.S., Canada and the UK, which generates the bulk of the company’s revenue. Roku surpassed 75.8 million active accounts as of the end of 2023.

Perhaps the biggest in news in streaming video in 2019 was the launch of Disney+, which offers TV and movie programing from all Disney brands including Pixar, Marvel and Star Wars. The venture signed up 10 million subscribers on its first day and had 164.2 million as of November 2022. Disney pulled significant content from Netflix, losing $2.5 billion in annual fees, to preserve it for Disney+. The company has two additional streaming services, ESPN+ and Hulu (Disney, which previously owned a two-thirds stake of the streaming service, agreed to acquire the remaining third from Comcast in a five-year deal during which Disney will pay Comcast for Hulu content. The deal is valued at approximately $27.5 billion.). Disney expects Disney+ to reach 260 million subscribers by 2024.

CBS All Access is a streaming service that offers subscribers limited commercial or commercial free access to its programming, and is available in more than 90% of the U.S. CBS holds back certain key content from other streaming providers.

In August 2021, AT&T spun off its DirecTV, AT&T TV and U-verse businesses into a single entity called DirecTV. AT&T has a 70% stake in the new company, with the remaining 30% owned by private equity firm TPG Capital, which paid AT&T $1.8 billion. Existing DirecTV content continues to air, including NFL Sunday Ticket and HBO Max.

Apple is also spending heavily to produce TV programming, and its budget is likely to grow quickly. Apple TV+ launched in November 2019, undercutting several of its rivals on price (one-year access is free to customers buying a new Apple device).

Amazon Prime Video offers a vast selection of titles instantly. The company has expanded its video services to more than 200 countries and territories, and offers live NFL Thursday Night Football games in the U.S. Amazon’s budget for production of unique content was an estimated $15 billion in 2022 in an effort to compete with Netflix. Amazon is having a dramatic impact on the streaming films sector, with its big budget productions. It paid $250 million for the rights to produce new Lord of the Rings episodes and is investing a total of $715 million in the project.

Comcast owns NBCUniversal and launched the Peacock streaming video service in July 2020. The service offers over 15,000 hours of NBC programming and movie classics, plus new original content such as Dr. Death and The Continental. As of late 2023, Peacock had 30 million subscribers.

DirecTV’s HBO Max launched in May 2020 and was previously owned outright by AT&T, before the August 2021 spinoff of DirecTV, AT&T TV and U-verse. The service includes original HBO content as well as network TV favorites such as Friends and The Big Bang Theory, plus classic films including Casablanca and When Harry Met Sally. The big news for HBO Max is the agreement with Warner Bros., in which the studio’s latest major film releases, such as Wonder Woman 1984, are available for streaming at the same time they open in theaters.

Home Entertainment: Home entertainment clusters now include TVs, sound systems, game consoles, smartphones, tablets, digital assistants like Siri and Alexa and computers. The faster the download speed, the better. In an increasing number of newly constructed neighborhoods, access is achieved by fiber to the home (FTTH) networks capable of delivery at blazing speeds. Within the home, the latest versions of Bluetooth and Wi-Fi make it easy to access entertainment wirelessly from every room. Verizon, Comcast and AT&T are among the leaders in this field in the U.S. Meanwhile, Google and AT&T are setting a new standard in selected cities by offering 1,000 Mbps connections, roughly 20 to 100 times typical high-speed internet rates.

Streaming one hour of a standard movie via Netflix can use 1 gigabit of bandwidth at standard settings. However, Netflix offers a reduced bandwidth setting that can reduce this by 70% to 300 megabits. High-definition movies can require up to 3 gigabits of bandwidth per hour. These requirements create both headaches and revenue opportunities for internet service providers of all types, from cable to DSL to smartphone service. Simply put, downloading or streaming a movie uses up vast amounts of bandwidth and places great strain on internet providers' infrastructure, whether wired or wireless.

While slipping, cable TV is far from dead. Paramount Network has a massively successful series called Yellowstone, which was enjoying its fifth season as of 2023. In addition to cable, the show is licensed for viewing on certain streaming services, including Amazon Prime Video, Hulu and Sling, but viewers may be required to pay extra fees or have a premium level of service.

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